Obama backs bipartisan student loan deal; Cornyn concurs

President Barack Obama announced today that he is in full support of the bipartisan student loan bill introduced last week after months of partisan finger-pointing.

The bill, expected to come to a vote sometime this week, would reduce the loan rates for 11 million student borrowers that were raised earlier this month, bringing the current 6.8 percent rates on undergraduate loans down to 3.68 percent.

The rate had been 3.4 percent until it doubled on July 1 because of congressional inaction.

The bill would affect more than 650,000 Texas college students.

Having been approved by the Democratic leadership last week, this bill offers a bipartisan agreement to Congress that would, in effect, save undergraduate students around $1,500.

Texas Sen. John Cornyn offered his views via Twitter, offering his support of the bipartisan approach.

I support a bipartisn, market-based student loan plan that will lower rates for approx. 650,000 Texas students.

The bill, penned by Sens. Joe Manchin, D-W.Va., and Richard Burr, R-N.C., has gained support from members of Congress on both sides of the aisle, but has also caused a stir when it comes to the interest rate cap.

As the bill currently stands, future interest rates would be capped as to avoid rate increases as seen in the past, most recently on July 1 when the rates doubled to from 3.4 percent 6.8 percent. This bipartisan approach would bring rates back down to the 3.86 percent figure.

A statement released by the White House Tuesday said, “These loans also include fixed interest rates over the life of the loan, protecting students from the risk that rates will fluctuate over time and providing certainty for borrowers.”

According to the Congressional Budget Office estimation, the deal would reduce the federal deficit over 10 years by nearly $715 million. However, because these rates are tied to the current market this number could drastically change and increase, critics of the proposal say.